Japan may ask public to cut back on natural gas usage

Japan may ask households and businesses to cut back on natural gas use on concerns that stable supplies from Russia could be disrupted. 

The country’s trade ministry will create a framework allowing it to call on large companies to curb gas use when supply is tight, Nikkei has reported, without saying where it got the information. The government will first ask households and businesses to curb gas usage and if that’s not enough to avoid supply shortages, will follow up with specific conservation targets, the report said. Details of the framework will be discussed among a ministry panel before demand for the fuel peaks in winter, according to the report. 

The report comes after recent moves by Russia to transfer the rights to the Sakhalin-2 natural gas project to a new company, which could threaten foreign owners including Japanese firms. The Japanese government is already asking its citizens to play their part in power conservation, as electricity supply is expected to be tight.

Japan is expected to have enough power supply this week, with rainy weather expected to lower temperatures in several parts of the country. The power-reserve ratio, which measures spare capacity of generators, is expected to be lowest for the Tokyo area on Wednesday at 7.1%, according to the trade ministry, still above the 3% needed for a stable grid. Japan’s next-day spot electricity price settled at 31.22 yen a kilowatt-hour on Monday, according to the Japan Electric Power Exchange, down 3.8% from a week earlier.